Best Buy’s Geek Squad is now available by subscription

Discussion
Source: Best Buy
May 23, 2018
George Anderson

Best Buy has launched its Total Tech Support Powered by Geek Squad subscription program nationwide to help customers get the help they need with all their technology-related issues.

For an annual fee of $199.99, subscribers receive unlimited Geek Squad technical support and various services in Best Buy’s stores, online, over the phone or through the chain’s Home app. Best Buy includes internet security software at no charge on up to three devices for its members. Member-only discounts are offered on in-home services including installation and setup of technology purchases, some hardware repairs and future purchases of service plans. The subscription service covers products regardless of whether they were purchased from Best Buy or from another source.

Best Buy tested the service over several months before announcing the program’s nationwide launch yesterday. The consumer electronics chain said it assisted 230,000 people in setting up, troubleshooting or fixing technology as part of the pilot.

With seventy-seven customer reviews on the Total Tech Support page, the service averages a rating of 4.7 out of five stars. Ninety-four percent of those using the service say they would recommend it to a friend.

“We all rely on technology more than ever and are constantly looking for that trusted friend to turn to for inspiration, advice and help. We built Total Tech Support for that very reason,” said Trish Walker, president of Best Buy Services, in a statement.

“This kind of service used to be available on single products only, but now essentially covers all of the electronics and appliances in your home,” Ms. Walker added.

Best Buy’s management has clearly identified its 20,000 Geek Squad members and services such as Total Tech Support as important elements in its “Best Buy 2020: Building The New Blue” growth strategy. Service related revenues increased four percent for Best Buy last year, according to a Minneapolis Star Tribune report.

DISCUSSION QUESTIONS: What effect will the Total Tech Support subscription service have on Best Buy’s reputation among consumers? How will it affect the chain’s sales? What will be the impact felt by Best Buy’s retail rivals?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is an awesome idea and a great way to keep consumers in the Best Buy ecosystem. "
"I like the numbers shown as results of the tests. But 77 participants is not a large enough number to prove the value."
"It is a hot trend that will continue to expand into other segments."

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28 Comments on "Best Buy’s Geek Squad is now available by subscription"


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Chris Buecker
BrainTrust

Very smart move! Implemented in the right away, I am confident it will be successful. By paying a flat rate, consumers will feel confident and relieved that somebody will take care of their tech problems. Great that it includes not only products purchased at Best Buy. In the future we will see more of these services. From retailers or specialized service companies such as enjoy.com, mila.com (Switzerland) or Deutsche Technikberaturng (Germany).

Ian Percy
BrainTrust

You are right, Chris. As I mentioned in my post, we’ve had remote service for all our computers for over 10 years, nothing new here though you are right in saying this will only grow. And our service (MyComputerWorks.com) is based right here in Phoenix as are most of their technicians. No need to go offshore.

Art Suriano
BrainTrust

Customers often become frustrated when having difficulties with their devices especially when they have limited knowledge. So conceptually, this is an excellent idea. My concern though is over time it’s too pricey. And rather than an annual charge of $199.99, I would prefer it broken down to a monthly fee that the customer could cancel at any time. When there is a monthly fee, and the payment is low, customers tend to forget about it, but when you see that significant number when it’s time to be renewed, often customers realize that they didn’t use the service, and then they don’t renew the subscription. Also, many times the customer needs assistance where they live so having to pay additional money for that is another concern. What I would recommend is when the customer spends “X” dollars at Best Buy, they receive the Geek Squad subscription free of charge for the first year. If Best Buy gets enough positive comments from customers using the service, that will help get others interested.

Bob Amster
BrainTrust

The move fills a need for those who are either heavy users or feel useless with technology. In either case, it provides an added level of support and security to this who subscribe. The service should increase loyalty to Best Buy which, in turn, should translate into added lifetime value for the subscribers.

Kevin Graff
BrainTrust

Love it! $200 isn’t inexpensive, but for those that sign up it will make Best Buy very “sticky” for them. That’s the objective of subscriptions and memberships. Just another way to differentiate yourself from the other guys (read: Amazon). It wasn’t too long ago that Best Buy was considered as being a soon-to-be-scrap heap member. They continue to reinvent themselves … other retailers should take note.

Sterling Hawkins
BrainTrust

And even though it covers electronics not necessarily purchased from Best Buy, there’ll be a payoff here as that “sticky-factor” grows over time. Members will look to Best Buy for new purchases since they’ll hold the keys for making it all work together.

Carol Spieckerman
BrainTrust

This is an awesome idea and a great way to keep consumers in the Best Buy ecosystem. Hopefully Total Tech Support technicians won’t aggressively pitch Best Buy products but the service could have the effect of increasing product sales regardless. Of course Amazon is pushing into this territory as well but there is no reason why Best Buy, as an established service brand, can’t get a slice of the pie.

Ed Rosenbaum
BrainTrust

This is a smart idea that Best Buy is initiating. I like the numbers shown as results of the tests. But 77 participants is not a large enough number to prove the value. The annual cost of $199.99 seems very high. I reviewed what I have spent over the past year. It does not come close to justifying me using the Geek Squad at that price. Maybe Best Buy will review this fee and justify to the spending public why it is so high.

Ian Percy
BrainTrust

It will take a little time to validate the Best Buy model, you are right about that, Ed. But frankly, I don’t know how they will make money at $199.99 a year. The equivalent of $17 a month, IMO, is a huge bargain. What is that, three visits to Starbucks a month? For the whole year that’s about three hours of an expert’s time if you hired them directly. I just wish my technology worked as well as yours!

Ian Percy
BrainTrust

This should be a very successful initiative for Best Buy — that is IF the numbers work. We’ve had our computers on a similar “remote access” service for a long time and it’s been the most worthwhile subscription program ever — for us. There’s been occasions where the computer guy has had to work for hours solving a problem or helping me move from an old laptop to a new one. The fact that Best Buy covers “all” electronics and appliances seems a little shallow to me given there is no remote access to my TV or refrigerator — yet. And a geek telling me to do this and that over a phone would drive me nuts.

The big challenge, it seems to me, is the credibility of the Geek Squad. How expert are they really? My early experience with Geek Squad sure wasn’t very reassuring. For much less money I have access to a MAC specialist who I regard with awe.

Lyle Bunn (Ph.D. Hon)
BrainTrust

A different pricing plan based on a subscription model is an expected and fairly minor change for Geek Squad. The more important aspect is that the Squad becomes a sales force for Best Buy paid by the consumer. The second great benefit is recurring revenues or income amortization that improves the revenue forecast for Geek Squad. I’ll be watching for a big financial transaction related directly to the Geek Squad business unit, or competitors that now see a clearer path to the high profitability of consumer and small business technology services.

Steve Montgomery
BrainTrust

“Technology is great when it works” is a phrase often heard these days. It is part of every discussion that includes a tech issue. We have become dependent on ever-increasingly complex technology for work and play, in all aspects of out daily life.

Best Buy’s program is like having a life preserver you know is always there in case it is needed. It may never be but knowing it is there provides comfort.

Perhaps more comfort than substance. In reading the list of services they are centered around installs, setup, backups, etc. rather than deeper dives on complex tech issues. I for one will continue to rely on the local company I have used. They can handle the really hard stuff. I see Best Buy’s program as tech support lite.

Bob Amster
BrainTrust

Yep. And I use that every time I get a chance — because it’s true.

Kai Clarke
BrainTrust

This is a great concept which I am surprised was not already in place. The subscription model drives greater profits, happier consumers and higher renewal rates. In this space, where this service could be an integral part of the product sale (or after) is that it keeps Best Buy at the top of mind level with their customers and elevates their satisfaction. It also serves as a distinguishing point of customer satisfaction between Best Buy and its competitors. What is there not to like for Best Buy and its customers? Great move Best Buy!

Chris Petersen, PhD.
BrainTrust

I agree with Chris Buecker — subscriptions for services are becoming a trend worldwide. Dixons in the U.K. is moving toward a variety of similar offerings. Everyone, no matter where you live, now needs a “digital plumber.” Customers will increasingly need more assistance as they move to smart homes. So it is essential that the subscription includes products that have not been purchased at the retailer. Very smart move by Best Buy at the right time. Perfect opportunity to both attract and retain customers.

Phil Rubin
BrainTrust
28 days 14 hours ago

Fee-based and subscription offerings are becoming more and more common, and Best Buy is fortunate to have Geek Squad to leverage for this offering. It will create preference, if not lock-in, among consumers wanting the support and it serves as a significant differentiator versus Amazon. It will be interesting to see how they might further use this offering, whether in terms of its credit card holders (or prospects), to drive high margin/high ticket purchases or through partners. Well done Best Buy!

Shep Hyken
BrainTrust

A subscription model is a powerful business model. And the customers who subscribe have confidence that they have backup technical support when they need it. Like a Prime membership, customers who subscribe to Total Tech Support will want to do their business with Best Buy. This is a good way to help create more loyalty with their customers.

Georganne Bender
BrainTrust

My only question to Best Buy is what took you so long? Earlier this year we had a computer crash so we took it to our local Geek Squad. $200 later it was as good as new.

Technology is such a big part of our lives today and sometimes the tools we use are frustrating. Best Buy’s subscription fee is reasonable. I am certain that consumers will enjoy having a tech person on call when they need help.

Ken Morris
BrainTrust
Consumers have embraced the subscription service model for many services from buying memberships (Amazon/Costco) to video/audio streaming, and even printer ink cartridge refilling. Subscription plans make services easier and more accessible. The Total Tech Support subscription service plan should be a valued offering for many consumers, as technology can be very frustrating and knowing that you have a single number to call for trusted support will help alleviate some of consumers’ frustrations with technology issues. The value proposition for the recurring revenue facet of the Best Buy strategy should be very attractive to the investment community. Some retailer make essentially all their profit from the membership aspect of the business and break even on what they sell. If Best Buy takes a page from that book it would allow Best Buy to lower prices and compete with the online pure-plays who don’t have the overhead of a store-based infrastructure. This will positively impact consumers’ opinion of Best Buy and it might inspire them to shop more frequently at Best Buy. Other electronics retailers will likely… Read more »
Mike Osorio
BrainTrust

This is a very interesting proposition. My initial reaction was that the annual fee seemed high to encourage trial, but with 230,000 people already signed up, that equates to $46 million in revenue. That indicates that a large subset of their consumer base desires this level of “insurance”, and is not put off by the price. In fact, if $199.99/year buys the consumer full support similar to individual traditionally purchased warranties, it is a bargain!

I think it is a huge win for them to leverage the existing Geek Squad overhead cost to both drive additional revenue as well as build stronger relationships with their customers. I imagine that if I loved the service, I would make all my future electronics and appliances at Best Buy — which of course is their intent.

Jennifer McDermott
BrainTrust

Excellent idea! This will do well not just with consumers but within the growing startup and gig economy where people have a need for inexpensive yet ongoing tech solutions.

Bill Hanifin
BrainTrust

Total Tech Support should prove to be an effective tactic to create and maintain a higher level of engagement with customers of Best Buy.

While cries of the Retail Apocalypse abound, retailers are scratching their heads about how to leverage their sunk investment in real estate. Being a showroom for Amazon is not going to be enough, and there needs to be an expansion of reasons “why” customers take time to walk into store locations.

A subscription service with ties to the stores themselves is a worthy attempt to leverage the physical locations at Best Buy and to create higher engagement with customers. On first sight, I thought the price point of the subscription was high, but in consideration of hourly rates for local computer repair stores, $199 is more than reasonable for an annual bundle of time and service.

Jeff Sward
Guest

Incredibly good idea … because it is based on TRUST. Customers wouldn’t spend half that amount if they didn’t TRUST Best Buy to be their partner in tech. That kind of emotional bond between consumer and brand is the ultimate goal for all brands.

Ray Riley
BrainTrust

This is a great move, and I agree with much of what has already been said. There is a large segment of America retiring and becoming less mobile, but will still require assistance as technology infiltrates more of their homes and lives. Could be the go-to Christmas gift from sons and daughters to their parents. This is a great move by Best Buy, and frankly no other retailer (aside from Apple) is positioned at scale to compete in this space.

Lauren Goldberg
Guest

Excellent move by Best Buy, as long as they can execute well. This can be a real point of differentiation for Best Buy among their competitors. As many others have said, this program can help develop a strong relationship between Best Buy and their customers, leading to “sticky” customers over time. And while the price point isn’t super low, it does seem very manageable and I can see it being given as a gift (retired parents, kids going off to college, etc).

Christopher P. Ramey
BrainTrust

Serve your clients and you will be rewarded with loyalty to your brand.

Kenneth Leung
BrainTrust

Nice way of keeping customers close with a subscription service. For a lot of consumers, this will be worth the money and as long as the quality of service is there, this will keep the customers returning to Best Buy to at least consider purchase. Note that this will cover products not purchased at Best Buy. Going to be interesting to see how the profit model works out for Best Buy and how much it helps convert to product sales.

Allison McGuire
BrainTrust

Subscriptions are only good when they are valuable. Best Buy is offering phone, online, in-store and app support only. They are not coming to your home as part of the subscription. Most manufacturer’s would provide the same support through those channels for free. And then only offering a discount for in-home visits as part of the subscription is simply not enough. The discount probably doesn’t cover the cost of the subscription. As you can tell, I am doubtful that this will be a big success.

wpDiscuz
Braintrust
"This is an awesome idea and a great way to keep consumers in the Best Buy ecosystem. "
"I like the numbers shown as results of the tests. But 77 participants is not a large enough number to prove the value."
"It is a hot trend that will continue to expand into other segments."

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